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Merchant Account FAQ's

What Is A Merchant Account?

A merchant account is a special type of bank account used by a merchant or business necessary for them to process credit and debit card transactions in a variety of ways: Online, over the phone or through the mail. A merchant account operates under an agreement between the merchant, the payment processor or independent sales organization (ISO) and acquiring bank in settling credit or debit card transactions.

What is Merchant Discount Rate (MDR)?

MDR is a fee charged from a merchant by a bank for accepting payments from customers through credit and debit cards in their establishments.

As long as the websites pertain to the same industry and your account manager approves the additional websites, you can link as many websites to your merchant account as you wish. However, if the industry is significantly different from the originally approved website, you cannot use your merchant account to process credit cards for that site.

How much do i need to process each month to maintain my account?

This depends on your industry type. The provider merchant accounts like to see processing volumes of at least €5,000 per month, but each industry has different standards.

 
What Is The Maximum Dollar Amount I Can Process In One Transaction?

The maximum amount on each transaction is determined by your acquiring bank. Many banks have a €1,000 to €3,000 limit while others may not have any restrictions at all.

Do Free Merchant Accounts With No Charges Actually Exist?

Free merchant accounts are a deceptive marketing ploy or a straight out scam. Most advertisements for free merchant accounts typically entail a free application and no setup fees. However, you will still have to pay processing fees, including a fixed transaction fee and discount rate, and monthly service fees, including payment gateway access fees and statement fees.

Why is this 3ds mid? We are not a high-risk business.

We prefer to work as a 3D gateway considering we deal with High risk merchants and to avoid CB’s.

We have an aggregated bank account , will it be ok for settlements?

Yes

Do we support 3ds or not? And if not supported, do we get notified on such cases?

We support 3Ds enrolled cards only.

Environment details- for Developer, Integration documents?

This will be shared with you once your account is approved.

Common reasons for credit card declines

A high volume of credit card declines can lead to a series of negative consequences for merchants, including penalties from the payment network that gradually increase as high denial ratio remains unsolved for a long period of time. There are many reasons why a credit card transaction can be declined by the issuer.

These are the most common ones:

1. Insufficient funds
According to Ethoca, more than 44% of all denied transactions happen because the payment method selected by the customer didn’t have sufficient funds (in case of debit cards). If the customer tried paying with a credit card, it simply means that he has hit the credit limit, and his issuing bank won’t allow the purchase to go through.

2. Transaction error
The second most common reason for credit card declines (20.6%) is that the customer mistakenly entered erroneous data while entering his payment details.

3. Lost/stolen card
According to the research conducted by Ethoca, about 10% of credit card denials happen because the rightful owner reported the payment card as lost or stolen – as a result, the transaction was declined by the issuing bank. In this case, it is recommended to not retry the transaction neither to provide additional goods and services to the cardholder. In case of a stolen card, make sure to report the transaction attempt to the corresponding issuing bank.

4. Unusual activity
Another common reason for declines is that the credit card company observed an unusual activity on the credit card.

Some activities may include shopping in neighbourhoods that are known for fraudulent practices, sudden change in shopping habits by the cardholder, and sometimes even making small purchases is enough to trigger a decline if the transaction looks like testing. Usually, before the thief starts spending frivolously with the stolen credit card, he will test it out to see if it works by purchasing an item for a small amount, or just filling up the car at the gas station. If a customer typically buys gas in the same area of your location but you suddenly fill your tank up in another part of the city, an alert can be triggered as well.

5. Unusual location
Similar to uncommon activity, making a purchase from an uncommon location can also trigger an alert of suspicion for possible fraudulent practices. Typically, your credit card issuer is familiar with the geographic boundaries of your regular transactions, and making purchases from another country (even if they are not actually fraudulent) can sometimes alert issuers.

6. Change in shipping address
Another common reason for credit card declines can be as simple as a change in the shipping address of the customer. If the issuer doesn’t recognize the new shipping address and it doesn’t match his usual billing address, the transaction could be declined.

7. Temporarily holds
Sometimes, the transaction was declined because the customer hit an “invisible” credit limit on his payment card. This happens when companies make pre-authorized charges on a purchase, putting a temporarily hold on a certain amount of money to ensure that the transaction isn’t fraudulent or that the customer has enough funds in his card.